Lots of things are going wrong, as I wrote on October 11. The Federal Reserve is raising interest rates. Stretched balance sheets at global banks have made it hard for foreign buyers of US Treasuries to hedge foreign exchange risk, putting more upward pressure on Treasury yields, as Asia Times reported in an October 9 exclusive.

The US housing market has imploded with new home sales down almost 20% year-on-year. The first round of tariffs on Chinese imports has raised costs for US manufacturers, as the Fed reported in its October Beige Book on Wednesday.

US corporate profits as reported to the Treasury were down year-on-year in the second quarter, but per-share profits rose due to record buybacks – an unsustainable sugar high.

One of the biggest sources of uncertainty is the next round of China tariffs, which will raise the costs of inputs to US manufacturers as well as consumer goods, adding up to 1% to the inflation rate, according to most Wall Street estimates.

We won’t know how badly tariffs will hit the US economy until the first quarter of 2019, when inventories purchased at pre-tariff rates run out and manufacturers and retailers have to re-order at higher prices. But the impact of the first round of tariffs is already big enough to move the needle, according to the Federal Reserve survey.

US consumers’ budgets already are stretched. A modest rise in mortgage rates has already pushed large numbers of home buyers out of the market, and homebuilders’ stocks are down 35% during the year to date. In fact, most sectors of the US stock market are down sharply.

“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

Or rather, that a century doesn't belong to a single power anymore and that a multipolar world has arisen and is here to stay.

The Chinese were given that option several years ago They rejected it out of hand.

“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

Or rather, that a century doesn't belong to a single power anymore and that a multipolar world has arisen and is here to stay.

A multipolar world is an unstable world.

The World was multipolar before World War One and again before World War Two. Look what happened!

It you want a peaceful, stable world then it can only be manifest in a clear, unequivocal international power hierarchy in which one particular power is undeniably the top dog.

I was thinking about this very thing. Multilateralism hasn't worked either. How may do we count the wars? Between 1945 and 1991 I don't recall any failed states. Some revolutions maybe Some proxy wars but not much else. After the fall of the Soviet Union things have gotten much hairier. Back then it was bilateral-ism. You pick which side you want to be on and you stay loyal to it. With assured mutual destruction guaranteeing things won't get to far out of hand. Since then I have personally seen a rally of Pakistanis on the Mall in Washington DC gleefully celebrating Pakistan being able to destroy India and be destroyed by India in return within a few minutes.

That was a real eye opener about the state of world peace.

Don't kid yourself Multilateralism doesn't work either. There is way too much incentive to cheat.

“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros